The Hindu Business Line : Goan mine owners break the ice to own a ship

The bigger Marmugao port had only one berth for iron ore vessels; that too with limited length and draft. It was possible to load 1,10,000 tonnes or so there; for more, ships had to approach transshippers in deep waters. These were neither fast nor having adequate onboard storage of ore, crucial to overcome erratic supply by barges. Marine logistics key to Salgaocar, Dempo coming together

Goan Pride's capacity
Given the smaller fore hold, the ship would store a maximum of 1,16,000 tonnes of ore
The transfer vessel can devote all its holds to coal, devote holds partly to iron ore and coal, store different iron ore grades in separate holds and blend if needed

THE TRANSHIPPER `Goan Pride' at the Marmugao port.

Marmugao , April 14

As a ship, the transfer vessel `Goan Pride' was not exceptionally big. You find much bigger ships in crude transport. But with cranes to unload barges, seven holds to store iron ore and a rail mounted loader for quick transfer of ore to ships, the world's biggest dry bulk `transhipper' catalysed something Goa's family dominated iron ore business had not managed in 50 years — it brought mine owners V.M. Salgaocar & Bro and V.S. Dempo & Co into a joint venture.

Beginning life 24-years ago as the OBO (oil, bulk, ore carrier) Transit, the ship was converted recently at a Chinese shipyard to do dry bulk transshipment. A `V' shaped cross-section was created through the entire hull so that the ship's holds emptied using gravity. Iron ore loaded into the holds from barges would drain thus when required for transfer, onto a conveyor belt at the ship's bottom.

Characteristics

Travelling the length of the vessel the conveyor looped up in a `C' shape at the fore, sandwiching ore between two belts for the ascent to the deck.

From the port side conveyor belt on deck, the rail mounted loading arm would transfer ore to the ship berthed alongside, at a fast pace.

The hull's `V' insertion created three skins, the space between the first and second used to ballast for stability.

Given the smaller fore hold, the ship would store a maximum of 1,16,000 tonnes of ore. Major challenge was ensuring that holds could shut down in the event of flooding even as a conveyor tunnel ran from aft to fore.

Industry's predicament

The mine owners' decision to jointly own Goan Pride went to the heart of the iron ore export industry's (foreign exchange earnings of Rs 3,000 crore) predicament.

Goa has 12-13 medium-big-sized mine owners but Portuguese laws had capped mine area per lease at 100 hectares.

Three to four years ago, when ore prices sank, the lack of scale bit deeply.

Trouble brewed from the buyers' end — as steel mills cut costs they pursued economies of scale in transport and insisted on large ships for ore transport.

Goa's iron ore moved on barges to big ports. Heaped at the Marmugao and Panjim ports, the ore was then loaded to ships.

The bigger Marmugao port had only one berth for iron ore vessels; that too with limited length and draft.

It was possible to load 1,10,000 tonnes or so there; for more, ships had to approach transshippers in deep waters.

These were neither fast nor having adequate onboard storage of ore, crucial to overcome erratic supply by barges.

When ore buyers moved to large ships, Goa proved a bottleneck; the vessels could not top up at berth or would be hit by loading delays inviting demurrage. Competing mines in Brazil and Australia offered much better transport cost.

Ironically, the water-borne part of the iron ore trade was its only component amenable to efficiency improvement. Mr Srinivas V. Dempo, Chairman & Managing Director, V.S. Dempo & Co, said pithead efficiencies had been achieved as best as one could for the present. Pithead was also the older, less flexible part of the industry.

Trade sources confirmed that through iron ore's recent tough times Goa had seen only informal moves to consolidate on landside, not real ones.

Modern laws allow larger mine sizes through consolidation but the procedure was seen as complicated.

Marine logistics

Marine logistics held the key to meet the buyer's price and retain margins. This was why Salgaocar and Dempo came together to offer higher throughput for the Goan Pride, which can load a Panamax in a day, Capesize, in two. When conversion cost escalated due to high steel price and upset economics for its owners Katra Wilhelmsen, the two mining families jointly bought the ship. Further, its operators claimed, the transfer vessel can devote all its holds to coal, devote holds partly to iron ore and coal, store different iron ore grades in separate holds and blend if needed.

On Tuesday, buyers — Nippon Steel, POSCO and Chinese steel companies — were represented at the Goan Pride's official commissioning. "If more opportunities to co-operate emerge, we would take a look,'' Mr Dempo said of the joint venture that should have happened long ago.

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